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UNITED STATES 
 
 SECURITIES AND EXCHANGE COMMISSION 
 
 Washington, D.C. 20549 
 
 FORM 10-Q 
 
 ☒ QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 
 
 For the quarterly period ended January 31, 2023 
 
 ☐ TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 
 
 For the transition period from ___________
to _____________
 
 Commission File Number: 001-38876 
 
 ATIF HOLDINGS LIMITED 
 
 (Exact Name of Registrant as Specified in Its
Charter)
 
 British Virgin Islands Not Applicable 
 (State of Other Jurisdiction of
 Incorporation or Organization)
 (I.R.S. Employer
 Identification No.)
 
 25391 Commercentre Dr. , Ste 200 , Lake Forest , CA 92630 
 (Address of Principal Executive Offices) (ZIP Code) 
 
 308-888-8888 
 
 (Registrant’s Telephone Number, Including Area Code)
 
 Not Applicable
 
 (Former name, former
address and former fiscal year, if changed since last report)
 
 Securities registered
pursuant to Section 12(b) of the Act: 
 
 Title of each class Trading Symbol Name of exchange on which registered 
 Ordinary Shares ATIF The Nasdaq Stock Market 
 
 Indicate by check mark
whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject
to such filing requirements for the past 90 days. ☒ YES ☐
 NO
 
 Indicate by check mark
whether the registrant has submitted electronically every Interactive Data File required to be pursuant to Rule 405 of Regulation S-T
(§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit
such files). ☒ YES ☐
 NO
 
 Indicate by check mark
whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an
emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller
reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
 
 Large accelerated filer ☐ Accelerated filer ☐ 
 Non-accelerated filer ☒ Smaller reporting company ☒ 
 Emerging growth company ☒ 
 
 If an emerging growth
company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or
revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐ 
 
 Indicate by check mark
whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act) ☐
 YES ☒ NO
 
 Indicate the number
of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
 
 As of March 15, 2023, there
were 9,627,452 ordinary shares issued and outstanding.
 
 TABLE OF CONTENTS 
 
 Page 

 PART I-FINANCIAL INFORMATION 
 
 Item 1. Financial Statements 
 1 

 Item 2. Management’s Discussion And Analysis Of Financial Condition And Results Of Operations 
 2 

 Item 3. Quantitative and Qualitative Disclosures About Market Risk 
 11 

 Item 4. Controls and Procedures 
 11 

 PART II-OTHER INFORMATION 
 
 Item 1. Legal Proceedings 
 13 

 Item 1A. Risk Factors 
 14 

 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 
 14 

 Item 3. Defaults Upon Senior Securities 
 14 

 Item 4. Mine Safety Disclosures 
 14 

 Item 5. Other Information 
 14 

 Item 6. Exhibits 
 14 

 SIGNATURES 
 15 

 i 

 FORWARD-LOOKING STATEMENTS 
 
 This Quarterly Report on
Form 10-Q contains certain forward-looking statements. The statements herein which are not historical reflect our current
expectations and projections about the Company’s future results, performance, liquidity, financial condition, prospects and opportunities
and are based upon information currently available to us and our management and our interpretation of what we believe to be significant
factors affecting our business, including many assumptions about future events. Such forward-looking statements include statements
regarding, among other things:
 
 ● our ability to produce, market
and generate sales of our services; 

 ● our ability to develop and/or
introduce new products and services; 

 ● our projected future sales, profitability
and other financial metrics; 

 ● our future financing plans; 

 ● our anticipated needs for working
capital; 

 ● the anticipated trends in our
industry; 

 ● our ability to expand our sales
and marketing capability; 

 ● acquisitions of other companies
or assets that we might undertake in the future; 

 ● competition existing today or
that will likely arise in the future; and 

 ● other factors discussed elsewhere
herein. 

 Forward-looking statements,
which involve assumptions and describe our future plans, strategies, and expectations, are generally identifiable by use of the words
“may,” “should,” “will,” “plan,” “could,” “target,” “contemplate,”
“predict,” “potential,” “continue,” “expect,” “anticipate,” “estimate,”
“believe,” “intend,” “seek,” or “project” or the negative of these words or other variations
on these or similar words. Actual results, performance, liquidity, financial condition and results of operations, prospects
and opportunities could differ materially from those expressed in, or implied by, these forward-looking statements as a result of various
risks, uncertainties and other factors, including the ability to raise sufficient capital to continue the Company’s operations.
These statements may be found under Part I, Item 2-“Management’s Discussion And Analysis Of Financial Condition And Results
Of Operations,” as well as elsewhere in this Quarterly Report on Form 10-Q generally. Actual events or results may differ
materially from those discussed in forward-looking statements as a result of various factors, including, without limitation, matters
described in this Quarterly Report on Form 10-Q. 
 
 In light of these risks
and uncertainties, there can be no assurance that the forward-looking statements contained in this Quarterly Report on Form 10-Q will
in fact occur.
 
 Potential investors should
not place undue reliance on any forward-looking statements. Except as expressly required by the federal securities laws, there is no
undertaking to publicly update or revise any forward-looking statements, whether as a result of new information, future events, changed
circumstances or any other reason.
 
 The forward-looking statements
in this Quarterly Report on Form 10-Q represent our views as of the date of this Quarterly Report on Form 10-Q. Such statements
are presented only as a guide about future possibilities and do not represent assured events, and we anticipate that subsequent events
and developments will cause our views to change. You should, therefore, not rely on these forward-looking statements as representing
our views as of any date after the date of this Quarterly Report on Form 10-Q. 
 
 This Quarterly Report on
Form 10-Q also contains estimates and other statistical data prepared by independent parties and by us relating to market size and growth
and other data about our industry. These estimates and data involve a number of assumptions and limitations, and potential investors
are cautioned not to give undue weight to these estimates and data. We have not independently verified the statistical and other industry
data generated by independent parties and contained in this Quarterly Report on Form 10-Q. In addition, projections, assumptions and
estimates of our future performance and the future performance of the industries in which we operate are necessarily subject to a high
degree of uncertainty and risk.
 
 Potential investors should
not make an investment decision based solely on our projections, estimates or expectations.
 
 ii 

 PART I. 
 
 FINANCIAL INFORMATION 
 
 ITEM 1. FINANCIAL STATEMENTS 
 
 INDEX TO FINANCIAL STATEMENTS 
 
 Contents 
 
 Page
 (s) 

 Unaudited Condensed Consolidated Balance Sheets 
 F-1 

 Unaudited Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) 
 F-2 

 Unaudited Condensed Consolidated Statements of Changes in Equity 
 F-3 

 Unaudited Condensed Consolidated Statements of Cash Flows 
 F-5 

 Notes to Unaudited Condensed Consolidated Financial Statements 
 F-6 – F-20 

 1 

 ATIF HOLDINGS LIMITED 
 
 UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS 
 
 January 31,
 2023 
 July 31,
 2022 

 (unaudited) 
 
 ASSETS 
 
 CURRENT ASSETS 
 
 Cash and cash equivalents 
 $ 829,387 
 $ 1,750,137 

 Accounts receivable 
 1,650,000 
 -
 
 Accounts receivable – a related party 
 762,000 
 762,000 

 Deposits 
 86,000 
 141,000 

 Investment in trading securities 
 73,627 
 33,346 

 Due from a related party 
 98,500 
 -
 
 Due from buyers of Leaping Group Corporation (“LGC”) 
 2,654,767 
 2,654,767 

 Prepaid expenses and other current assets 
 638,979 
 651,210 

 Total current assets 
 6,793,260 
 5,992,460 

 Long-term investment 
 - 
 335,000 

 Property and equipment, net 
 247,529 
 272,700 

 Intangible assets, net 
 113,331 
 153,331 

 Right-of- use assets, net 
 1,280,746 
 1,383,464 

 TOTAL ASSETS 
 $ 8,434,866 
 $ 8,136,955 

 LIABILITIES AND EQUITY 
 
 CURRENT LIABILITIES 
 
 Accounts payable 
 $ 482 
 $ 482 

 Deferred revenue 
 70,000 
 90,785 

 Taxes payable 
 566,957 
 -
 
 Accrued expenses and other current liabilities 
 1,339,866 
 2,274,771 

 Operating lease liabilities, current 
 511,373 
 433,061 

 Total current liabilities 
 2,488,678 
 2,799,099 

 Operating lease liabilities, noncurrent 
 826,070 
 985,249 

 TOTAL LIABILITIES 
 3,314,748 
 3,784,348 

 Commitments 
 
 EQUITY 
 
 Ordinary shares, $ 0.001 par value, 100,000,000,000 shares authorized, 9,627,452 shares and 9,627,452 shares issued and outstanding as of January 31, 2023 and July 31, 2022, respectively 
 9,627 
 9,627 

 Additional paid-in capital 
 29,196,350 
 29,496,350 

 Statutory reserve 
 355,912 
 355,912 

 Accumulated deficit 
 ( 24,441,771 ) 
 ( 25,140,237 ) 

 Total ATIF Holdings Limited Stockholders’ equity 
 5,120,118 
 4,721,652 

 Noncontrolling interest 
 -
 
 ( 369,045 ) 

 TOTAL LIABILITIES AND EQUITY 
 $ 8,434,866 
 $ 8,136,955 

 The accompanying notes are an integral part
of these unaudited condensed consolidated financial statements. 
 
 F- 1 

 ATIF HOLDINGS LIMITED 
 
 UNAUDITED CONDENSED CONSOLIDATED STATEMENTS
OF OPERATIONS AND 

COMPREHENSIVE INCOME (LOSS) 
 
 For the Three Months Ended 

January 31, 
 For the Six Months Ended

 January 31, 

 2023 
 2022 
 2023 
 2022 

 (unaudited) 
 (unaudited) 
 (unaudited) 
 (unaudited) 

 Revenues 
 $ 1,900,000 
 $ 7,680 
 $ 2,200,000 
 $ 524,155 

 Operating expenses: 
 
 Selling expenses 
 ( 48,000 ) 
 -
 
 ( 53,000 ) 
 ( 225,113 ) 

 General and administrative expenses 
 ( 581,112 ) 
 ( 827,100 ) 
 ( 1,081,008 ) 
 ( 1,705,255 ) 

 Total operating expenses 
 ( 566,112 ) 
 ( 827,100 ) 
 ( 1,134,008 ) 
 ( 1,930,368 ) 

 Income (loss) from operations 
 1,333,888 
 ( 819,420 ) 
 1,065,992 
 ( 1,406,213 ) 

 Other income (expenses): 
 
 Interest (expenses) income, net 
 ( 57,973 ) 
 25 
 1,874 
 52 

 Other income (expenses), net 
 62,903 
 ( 80,219 ) 
 122,403 
 ( 53,604 ) 

 Income (loss) from investment in trading securities 
 39,120 
 ( 454,555 ) 
 19,116 
 ( 793,929 ) 

 Gain from disposal of subsidiaries 
 -
 
 -
 
 56,038 
 -
 
 Total other income (expenses), net 
 44,050 
 ( 534,749 ) 
 199,431 
 ( 847,481 ) 

 Income (loss) before income taxes 
 1,377,938 
 ( 1,354,169 ) 
 1,265,423 
 ( 2,253,694 ) 

 Income tax provision 
 ( 566,957 ) 
 -
 
 ( 566,957 ) 
 - 

 Net income (loss) 
 810,981 
 ( 1,354,169 ) 
 698,466 
 ( 2,253,694 ) 

 Less: Net loss attributable to non-controlling interests 
 -
 
 271,516 
 - 
 89,249 

 Net income (loss) attributable to ATIF Holdings Limited 
 810,981 
 ( 1,082,653 ) 
 698,466 
 ( 2,164,445 ) 

 Other comprehensive income (loss): 
 
 Total foreign currency translation adjustment 
 -
 
 6,303 
 - 
 ( 5,084 ) 

 Comprehensive income (loss) 
 810,981 
 ( 1,347,866 ) 
 698,466 
 ( 2,258,778 ) 

 Less: comprehensive loss attributable to non-controlling interests 
 -
 
 271,516 
 - 
 89,249 

 Comprehensive income (loss) attributable to ATIF Holdings Limited 
 $ 810,981 
 $ ( 1,076,350 ) 
 $ 698,466 
 $ ( 2,169,529 ) 

 (Earnings) loss per share – basic and diluted
 
 $ 0.08 
 $ ( 0.11 ) 
 $ 0.07 
 $ ( 0.23 ) 

 Weighted Average Shares Outstanding 
 
 Basic and diluted
 
 9,627,452 
 9,566,983 
 9,627,452 
 9,399,692 

 The accompanying notes are an integral part
of these unaudited condensed consolidated financial statements. 
 
 F- 2 

 ATIF HOLDINGS LIMITED 
 
 UNAUDITED CONDENSED CONSOLIDATED STATEMENTS
OF CHANGES IN EQUITY 
 
 FOR THE THREE AND SIX MONTHS ENDED JANUARY 31,
2023 AND 2022 
 
 For the Three Months Ended January 31, 2023 and 2022 
 
 Ordinary Share 
 Additional
 Paid in 
 Statutory 
 Accumulated 
 Accumulated
 Other
 Comprehensive 
 Noncontrolling 
 
 Shares 
 Amount 
 Capital 
 Reserves 
 deficit 
 Loss 
 interests 
 Total 

 Balance at October 31, 2021 (unaudited) 
 9,551,245 
 $ 9,551 
 $ 31,496,426 
 $ 355,912 
 $ ( 23,137,225 ) 
 $ ( 186,607 ) 
 $ 303,076 
 $ 8,841,133 

 Issuance of ordinary shares pursuant to exercise of warrants 
 70,130 
 70 
 ( 70 ) 
 -
 
 -
 
 -
 
 -
 
 -
 
 Issuance of ordinary shares as fractional shares of reverse stock split 
 6,067 
 6 
 ( 6 ) 
 -
 
 -
 
 -
 
 -
 
 -
 
 Net loss for the period 
 - 
 -
 
 -
 
 -
 
 ( 1,082,653 ) 
 -
 
 ( 271,516 ) 
 ( 1,354,169 ) 

 Foreign currency translation adjustment 
 - 
 -
 
 -
 
 -
 
 -
 
 6,303 
 -
 
 6,303 

 Balance at January 31, 2022 (unaudited) 
 9,627,452 
 $ 9,627 
 $ 31,496,350 
 $ 355,912 
 $ ( 24,219,878 ) 
 $ ( 180,304 ) 
 $ ( 76,285 ) 
 $ 7,385,422 

 Balance at October 31, 2022 (unaudited) 
 9,627,452 
 $ 9,627 
 $ 29,196,350 
 $ 355,912 
 $ ( 25,252,752 ) 
 $ -
 
 $ -
 
 $ 4,309,137 

 Net income for the period 
 - 
 -
 
 -
 
 -
 
 810,981 
 -
 
 -
 
 810,981 

 Balance at January 31, 2023 (unaudited) 
 9,627,452 
 $ 9,627 
 $ 29,196,350 
 $ 355,912 
 $ ( 24,441,771 ) 
 $ -
 
 $ -
 
 $ 5,120,118 

 F- 3 

 ATIF HOLDINGS LIMITED 
 
 UNAUDITED CONDENSED CONSOLIDATED STATEMENTS
OF CHANGES IN EQUITY 
 
 FOR THE THREE AND SIX MONTHS ENDED JANUARY 31,
2023 AND 2022 
 
 For the Six Months Ended January 31, 2023 and 2022 
 
 Ordinary Share 
 Additional
 Paid in 
 Statutory 
 Accumulated 
 Accumulated
 Other
 Comprehensive 
 Noncontrolling 
 
 Shares 
 Amount 
 Capital 
 Reserves 
 deficit 
 Loss 
 interests 
 Total 

 Balance at July 31, 2021 
 9,161,390 
 $ 9,161 
 $ 31,428,619 
 $ 355,912 
 $ ( 22,055,433 ) 
 $ ( 175,220 ) 
 $ 120,809 
 $ 9,683,848 

 Issuance of ordinary shares pursuant to exercise of warrants 
 459,985 
 460 
 1,067,737 
 -
 
 -
 
 -
 
 -
 
 1,068,197 

 Issuance of ordinary shares as fractional shares of reverse stock split 
 6,067 
 6 
 ( 6 ) 
 -
 
 -
 
 -
 
 -
 
 -
 
 Withdrawal of capital from a subsidiary 
 - 
 -
 
 ( 1,000,000 ) 
 -
 
 -
 
 -
 
 -
 
 ( 1,000,000 ) 

 Appropriation of investment gain to the limited partner of ATIF LP 
 - 
 -
 
 -
 
 -
 
 -
 
 -
 
 ( 107,845 ) 
 ( 107,845 ) 

 Net loss (income) for the period 
 - 
 -
 
 -
 
 -
 
 ( 2,164,445 ) 
 -
 
 ( 89,249 ) 
 ( 2,253,694 ) 

 Foreign currency translation adjustment 
 - 
 -
 
 -
 
 -
 
 -
 
 ( 5,084 ) 
 -
 
 ( 5,084 ) 

 Balance at January 31, 2022 (unaudited) 
 9,627,452 
 $ 9,627 
 $ 31,496,350 
 $ 355,912 
 $ ( 24,219,878 ) 
 $ ( 180,304 ) 
 $ ( 76,285 ) 
 $ 7,385,422 

 Balance at July 31, 2022 
 9,627,452 
 $ 9,627 
 $ 29,496,350 
 $ 355,912 
 $ ( 25,140,237 ) 
 $ ( 174,410 ) 
 $ ( 369,045 ) 
 $ 4,352,607 

 Reclassification of accumulated other comprehensive loss 
 - 
 -
 
 -
 
 -
 
 ( 174,410 ) 
 174,410 
 -
 
 -
 
 Disposal of a subsidiary 
 - 
 -
 
 ( 300,000 ) 
 -
 
 -
 
 -
 
 369,045 
 69,045 

 Net income for the period 
 - 
 -
 
 -
 
 -
 
 698,466 
 -
 
 -
 
 698,466 

 Balance at January 31, 2023 (unaudited) 
 9,627,452 
 $ 9,627 
 $ 29,196,350 
 $ 355,912 
 $ ( 24,441,771 ) 
 $ -
 
 $ -
 
 $ 5,120,118 

 The accompanying notes are an integral part
of these unaudited condensed consolidated financial statements. 
 
 F- 4 

 ATIF HOLDINGS LIMITED 
 
 UNAUDITED CONDENSED CONSOLIDATED STATEMENTS
OF CASH FLOWS 
 
 For the Six Months Ended
 January 31, 

 2023 
 2022 

 (unaudited) 
 (unaudited) 

 Cash flows from operating activities: 
 
 Net income (loss) 
 $ 698,466 
 ( 2,253,694 ) 

 Adjustments to reconcile net income (loss) to net cash (used in) provided by operating activities: 
 
 Depreciation and amortization 
 73,311 
 102,751 

 Provision of doubtful debts 
 -
 
 89,561 

 Amortization of right-of-use assets 
 212,210 
 255,082 

 Loss from disposal of property and equipment 
 -
 
 53,757 

 Loss from disposal of a subsidiary 
 69,045 
 -
 
 (Gain) loss from investment in trading securities 
 ( 19,116 ) 
 793,929 

 Changes in operating assets and liabilities: 
 
 Accounts receivable 
 ( 1,650,000 ) 
 11,749 

 Deposits 
 55,000 
 ( 66,000 ) 

 Prepaid expenses and other current assets 
 12,232 
 236,084 

 Deferred revenue 
 ( 20,785 ) 
 ( 100,000 ) 

 Taxes payable 
 566,957 
 ( 445 ) 

 Accrued expenses and other liabilities 
 ( 561,677 ) 
 1,442,409 

 Lease liabilities 
 ( 190,357 ) 
 ( 237,023 ) 

 Net cash (used in) provided by operating activities 
 ( 754,714 ) 
 328,160 

 Cash flows from investing activities: 
 
 Purchase of property and equipment 
 ( 8,140 ) 
 ( 5,140 ) 

 Proceeds from disposal of property and equipment 
 -
 
 276,821 

 Investment in trading securities 
 ( 59,396 ) 
 ( 2,365,989 ) 

 Loans made to a related party 
 ( 100,000 ) 
 -
 
 Collection of borrowings from a related party 
 1,500 
 -
 
 Net cash used in investing activities 
 ( 166,036 ) 
 ( 2,094,308 ) 

 Cash flows from financing activities: 
 
 Proceeds from exercise of warrants 
 -
 
 1,068,203 

 Withdrawal of capital from a subsidiary 
 -
 
 ( 1,000,000 ) 

 Payment of investment gains to the limited partner of ATIF LP 
 -
 
 ( 107,845 ) 

 Net cash used in financing activities 
 -
 
 ( 39,642 ) 

 Effect of exchange rate changes on cash 
 -
 
 ( 71,672 ) 

 Net decrease in cash 
 ( 920,750 ) 
 ( 1,877,462 ) 

 Cash, beginning of period 
 1,750,137 
 5,596,740 

 Cash, end of period 
 $ 829,387 
 $ 3,719,278 

 Supplemental disclosure of cash flow information: 
 
 Cash paid for interest expenses 
 $ -
 
 $ -
 
 Cash paid for income tax 
 $ -
 
 $ -
 
 Supplemental disclosure of Non-cash investing and financing activities of discontinued operations 
 
 Right-of-use assets obtained in exchange for operating lease obligations 
 $ 109,492 
 $ -
 
 The accompanying notes are an integral part
of these unaudited condensed consolidated financial statements. 
 
 F- 5 

 ATIF HOLDINGS LIMITED 
 
 NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS 
 
 NOTE 1 – ORGANIZATION AND DESCRIPTION
OF BUSINESS 
 
 ATIF Holdings Limited (“ATIF” or the
“Company”), formerly known as Eternal Fairy International Limited and Asia Times Holdings Limited, was incorporated under
the laws of the British Virgin Islands (“BVI”) on January 5, 2015, as a holding company to develop business opportunities
in the People’s Republic of China (the “PRC” or “China”). The Company adopted its current name on March 7,
2019.
 
 On October 6 and October 7, 2022, ATIF Inc., a wholly
owned subsidiary of ATIF, established ATIF Business Consulting LLC (“ATIF BC”) and ATIF Business Management LLC (“ATIF
BM”) under the laws of the State of California of the United States, respectively. On October 3, 2022, ATIF established ATIF Southern
LLC under the laws of California of the United States. On April 25, 2022, the Company established ATIF Investment Limited (“ATIF
Investment”) under the laws of BVI. On December 22, 2021, ATIF Inc. established ATIF BD LLC (“ATIF BD”) under the laws
of California of the United States.
 
 On August 1, 2022, the Company entered into a
sales agreement with a third party, pursuant to which the Company sold all of its equity interest in ATIF GP at the cost of $ 50,000 . The
management believed the disposition does not represent a strategic shift because it is not changing the way it is running its consulting
business. The Company has not shifted the nature of its operations. The termination is not accounted as discontinued operations in accordance
with ASC 205-20. Upon the closing of the Agreement, ATIF GP is no longer our subsidiary and ATIF USA ceased to be the investment manager
of ATIF LP.
 
 As of January 31, 2023, the Company’s unaudited
condensed consolidated financial statements reflect the operating results of the following entities:
 
 Name of Entity 
 
 Date of

Incorporation 
 
 Place of

Incorporation 
 
 % of

Ownership 
 
 Principal Activities 
 
 Parent company: 
 
 ATIF Holdings Limited (“ATIF”) 
 
 January 5, 2015 
 
 British Virgin Islands 
 
 Parent 
 
 Investment holding 
 
 Wholly owned subsidiaries of ATIF 
 
 ATIF Inc. (“ATIF USA”) 
 
 October 26, 2020 
 
 USA 
 
 100% 
 
 Consultancy and information technology support 
 
 ATIF Investment LLC (“ATIF Investment”) 
 
 April 25, 2022 
 
 BVI 
 
 100% 
 
 Consultancy and information technology support 
 
 ATIF Southern LLC 
 
 October 3, 2022 
 
 USA 
 
 100% 
 
 Consultancy and information technology support 
 
 ATIF BD 
 
 December 22, 2021 
 
 USA 
 
 100% owned by ATIF USA 
 
 Consultancy and information technology support 
 
 ATIF BC 
 
 October 6, 2022 
 
 USA 
 
 100% owned by ATIF USA 
 
 Consultancy and information technology support 
 
 ATIF BM 
 
 October 6, 2022 
 
 USA 
 
 100% owned by ATIF USA 
 
 Consultancy and information technology support 
 
 F- 6 

 ATIF HOLDINGS LIMITED 
 
 NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS 
 
 NOTE 2 – LIQUIDITY and GOING CONCERN 
 
 For the three and six months ended January 31,
2023, the Company reported a net income of $ 0.8 million and $ 0.7 million, respectively. For the three and six months ended January 31,
2022, the Company reported a net loss of $ 1.4 million and $ 2.3 million, respectively. For the six months ended January 31, 2023 and 2022,
the Company reported operating cash outflows of $ 0.7 million and cash inflows of $0.3 million, respectively.
 
 In assessing the Company’s ability to continue
as a going concern, the Company monitors and analyzes its cash and its ability to generate sufficient cash flow in the future to support
its operating and capital expenditure commitments.
 
 As of January 31, 2023, the Company had cash of
$ 0.8 million. On the other hand, the Company had current liabilities of $ 2.5 million. Currently the Company had four service-in-progress
agreements, and expected to collect consulting service fees of $2.4 million for the next 12 months. Due to the impact of COVID-19, some
of our existing customers may experience financial distress or business disruptions, which could lead to potential delay or default on
their payments. Any increased difficulty in collecting accounts receivable, or early termination of our existing consulting service agreements
due to deterioration in economic conditions could further negatively impact our cash flows. Given these factors, our potential customers’
perception and confidence to go public in the United States has been negatively impacted and our operating revenue and cash flows may
continue to underperform in the near terms. Although we had cash of $ 0.8 million as of January 31, 2023, given the above mentioned uncertainties,
the management believes that the Company will continue as a going concern in the following 12 months from the date the Company’s
unaudited condensed consolidated financial statements are issued.
 
 Currently, the Company intends to finance its
future working capital requirements and capital expenditures from cash generated from operating activities and funds raised from equity
financings.
 
 The accompanying unaudited condensed consolidated
financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of
liabilities in the ordinary course of business. The financial statements do not include any adjustments relating to the recoverability
and classification of recorded asset amounts or the amounts and classification of liabilities that might result from the outcome of the
uncertainties described above.
 
 F- 7 

 ATIF HOLDINGS LIMITED 
 
 NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS 
 
 NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES 
 
 Basis of Presentation and Principles of Consolidation 
 
 The interim
unaudited condensed consolidated financial statements are prepared and presented in accordance with accounting principles generally accepted
in the United States (“U.S. GAAP”). 
 
 The unaudited
condensed consolidated balance sheets as of January 31, 2023 and for the unaudited condensed consolidated statement of operations and
comprehensive loss for the three and six months ended January 31, 2023 and 2022 have been prepared without audit, pursuant to the rules
and regulations of the SEC and pursuant to Regulation S-X. Certain information and footnote disclosures, which are normally included in
annual financial statements prepared in accordance with U.S. GAAP, have been omitted pursuant to those rules and regulations. The unaudited
condensed consolidated financial statements should be read in conjunction with the audited financial statements and the notes thereto,
included in the Form 10-K for the fiscal year ended July 31, 2022, which was filed with the SEC on November 2, 2022 . 
 
 In the opinion
of the management, the accompanying unaudited condensed consolidated financial statements reflect all normal recurring adjustments, which
are necessary for a fair presentation of financial results for the interim periods presented. The Company believes that the disclosures
are adequate to make the information presented not misleading. The accompanying unaudited condensed consolidated financial statements
have been prepared using the same accounting policies as used in the preparation of the Company’s unaudited condensed consolidated
financial statements for the year ended July 31, 2022. The results of operations for the three and six months ended January 31, 2023 and
2022 are not necessarily indicative of the results for the full years. 
 
 The unaudited
condensed consolidated financial statements of the Company include the accounts of the Company and its subsidiaries. All intercompany
balances and transactions have been eliminated upon consolidation. 
 
 Noncontrolling Interests 
 
 As of July 31, 2022, the non-controlling interest
represent minority shareholders’ 76.6 % ownership interest in ATIF LP, over which the Company had 23.4 % ownership interest and acted
as an investment manager. The Company had non-controlling interest of $( 369,045 ) as of July 31, 2022.
 
 On August 1, 2022, the Company entered into a
sales agreement with a third party, pursuant to which the Company sold all of its equity interest in ATIF GP for $ 50,000 . Upon the closing
of the Agreement, ATIF GP is no longer our subsidiary and ATIF USA ceased to be the investment manager of ATIF LP. As of January 31, 2023,
the Company had no non-controlling interest.
 
 Use of Estimates 
 
 In preparing the consolidated financial statements
in conformity with U.S. GAAP, management makes estimates and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses
during the reporting period. These estimates are based on information as of the date of the unaudited condensed consolidated financial
statements. Significant estimates required to be made by management include, but are not limited to, the valuation of accounts receivable,
useful lives of property and equipment and intangible assets, the recoverability of long-lived assets, provision necessary for contingent
liabilities and realization of deferred tax assets. Actual results could differ from those estimates.
 
 F- 8 

 ATIF HOLDINGS LIMITED 
 
 NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS 
 
 NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES (continued) 
 
 Fair Value of Financial Instruments 
 
 ASC 825-10 requires certain disclosures regarding
the fair value of financial instruments. Fair value is defined as the price that would be received to sell an asset or paid to transfer
a liability in an orderly transaction between market participants at the measurement date. A three-level fair value hierarchy prioritizes
the inputs used to measure fair value. The hierarchy requires entities to maximize the use of observable inputs and minimize the use of
unobservable inputs. The three levels of inputs used to measure fair value are as follows:
 
 ● 
 Level 1 – inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets. 

 ● 
 Level 2 – inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, quoted market prices for identical or similar assets in markets that are not active, inputs other than quoted prices that are observable and inputs derived from or corroborated by observable market data. 

 ● 
 Level 3 – inputs to the valuation methodology are unobservable. 

 Fair
value of investment in trading securities are based on quoted prices in active markets. The carrying amounts of the Company’s other
financial instruments including cash and cash equivalents, deposits, due from buyers of LGC and other current assets, accounts payable,
and accrued expenses and other current liabilities approximate their fair values because of the short-term nature of these assets and
liabilities. For lease liabilities, fair value approximates their carrying value at the year-end as the interest rates used to discount
the host contracts approximate market rates. 
 
 Revenue Recognition 
 
 The Company recognizes revenue in accordance with
ASC 606 Revenue from Contracts with Customers (“ASC 606”).
 
 To determine revenue recognition for contracts
with customers, the Company performs the following five steps: (i) identify the contract with the customer, (ii) identify the
performance obligations in the contract, (iii) determine the transaction price, including variable consideration to the extent that
it is probable that a significant future reversal will not occur, (iv) allocate the transaction price to the respective performance
obligations in the contract, and (v) recognize revenue when (or as) the Company satisfies the performance obligation.
 
 The Company recognizes revenue when it transfers
its goods and services to customers in an amount that reflects the consideration to which the Company expects to be entitled in such exchange.
 
 The Company currently generates its revenue from
the following main sources:
 
 (1) 
 Revenue from customer’s initial registration fee 

 In order to engage with the Company for various
consulting services, a new customer is required to pay an initial non-refundable registration fee to the Company and the Company will
then post the customer’s information and profiles on its website, at which point, the Company’s performance obligations are
satisfied and such registration fee is recognized as revenue. The Company does not charge additional customer profile maintenance fee
after the initial posting is completed as limited effort is required for the Company to maintain such information on an on-going basis.
No revenues were generated from customer’s initial registration for the three and six months ended January 31, 2023 and 2022.
 
 F- 9 

 ATIF HOLDINGS LIMITED 
 
 NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS 
 
 NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES (continued) 
 
 Revenue Recognition (continued) 
 
 (2) 
 Revenue from consulting services 

 The Company provides various consulting services
to its members, especially to those who have the intention to be publicly listed in the stock exchanges in the United States and other
countries. The Company categorizes its consulting services into three Phases:
 
 Phase I consulting services primarily include
due diligence review, market research and feasibility study, business plan drafting, accounting record review, and business analysis and
recommendations. Management estimates that Phase I normally takes about three months to complete based on its past experience.
 
 Phase II consulting services primarily include
reorganization, pre-listing education and tutoring, talent search, legal and audit firm recommendation and coordination, VIE contracts
and other public-listing related documents review, merger and acquisition planning, investor referral and pre-listing equity financing
source identification and recommendations, and independent directors and audit committee candidate’s recommendation. Management
estimates that Phase II normally takes about eight months to complete based on its past experience.
 
 Phase III consulting services primarily include
shell company identification and recommendation for customers expecting to become publicly listed through reverse merger transaction;
assistance in preparation of customers’ public filings for IPO or reverse merger transactions; and assistance in answering comments
and questions received from regulatory agencies. Management believes it is very difficult to estimate the timing of this phase of service
as the completion of Phase III services is not within the Company’s control.
 
 Each phase of consulting services is stand-alone
and fees associated with each phase are clearly identified in service agreements. Revenue from providing Phase I and Phase II consulting
services to customers is recognized ratably over the estimated completion period of each phase as the Company’s performance obligations
related to these services are carried out over the whole duration of each Phase. Revenue from providing Phase III consulting services
to customers is recognized upon completion of the reverse merger transaction or IPO transaction when the Company’s promised services
are rendered and the Company’s performance obligations are satisfied. Revenue that has been billed and not yet recognized is reflected
as deferred revenue on the balance sheet.
 
 Depending on the complexity of the underlying
service arrangement and related terms and conditions, significant judgments, assumptions, and estimates may be required to determine when
substantial delivery of contract elements has occurred, whether any significant ongoing obligations exist subsequent to contract execution,
whether amounts due are collectible and the appropriate period or periods in which, or during which, the completion of the earnings process
occurs. Depending on the magnitude of specific revenue arrangements, adjustment may be made to the judgments, assumptions, and estimates
regarding contracts executed in any specific period.
 
 The Company recognized revenues from consulting
services of $ 1.9 million and $ 7,680 , respectively, for the three months ended January 31, 2023 and 2022. The Company recognized revenues
from consulting services of $ 2.2 million and $ 0.5 million, respectively, for the six months ended January 31, 2023 and 2022.
 
 F- 10 

 ATIF HOLDINGS LIMITED 
 
 NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS 
 
 NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES (continued) 
 
 Income Taxes 
 
 The Company accounts for income taxes under ASC
740. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the consolidated
financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities
are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected
to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the
period including the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount
expected to be realized.
 
 An uncertain tax position is recognized only if
it is “more likely than not” that the tax position would be sustained in a tax examination. The amount recognized is the largest
amount of tax benefit that is greater than 50 % likely of being realized on examination. For tax positions not meeting the “more
likely than not” test, no tax benefit is recorded. Penalties and interest incurred related to underpayment of income tax are classified
as income tax expense in the period incurred. The Company did not have unrecognized uncertain tax positions or any unrecognized liabilities,
interest or penalties associated with unrecognized tax benefit as of January 31, 2023. As of January 31, 2023, all of the Company’s
income tax returns for the tax years ended December 31, 2018 through December 31, 2022 remain open for statutory examination
by relevant tax authorities.
 
 Foreign Currency Translation 
 
 The functional currency for ATIF is the U.S Dollar
(“US$”). ATIF HK uses Hong Kong dollar as its functional currency, and Huaya uses RMB as its functional currency. For the
three and six months ended January 31, 2022, the Company primarily operates its business through ATIF Inc, ATIF HK and Huaya, and the
latter two entities were disposed of on May 31, 2022. For the three and six months ended January 31, 2023, the Company operates its business
through ATIF Inc.
 
 The Company’s unaudited condensed consolidated
financial statements have been translated into US$.
 
 Assets and liabilities accounts are translated
using the exchange rate at each reporting period end date. Equity accounts are translated at historical rates. Income and expense accounts
are translated at the average rate of exchange during the reporting period. The resulting translation adjustments are reported under other
comprehensive income (loss). Gains and losses resulting from the translations of foreign currency transactions and balances are reflected
in the results of operations.
 
 The RMB is not freely convertible into foreign
currency and all foreign exchange transactions must take place through authorized institutions. No representation is made that the RMB
amounts could have been, or could be, converted into US$ at the rates used in translation.
 
 The following table outlines the currency exchange
rates that were used in creating the unaudited condensed consolidated financial statements as of and for the six months ended January
31, 2022 in this report:
 
 January 31,

 2022 

 Foreign currency 
 Period-end
 spot rate 
 Average rate 

 RMB: 1USD 
 0.1572 
 0.1560 

 HKD: 1USD 
 0.1282 
 0.1282 

 F- 11 

 ATIF HOLDINGS LIMITED 
 
 NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS 
 
 NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES (continued) 
 
 Segment reporting 
 
 Operating segments are defined as components of
an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker
(“CODM”), or decision making group, in deciding how to allocate resources and in assessing performance. The Company’s
CODM is Mr. Liu, the Chairman of the Board of Directors and CEO.
 
 The Company’s organizational structure is
based on a number of factors that the CODM uses to evaluate, view and run its business operations which include, but not limited to, customer
base, homogeneity of service and technology. The Company’s operating segments are based on such organizational structure and information
reviewed by the CODM to evaluate the operating segment results. Based on management’s assessment, the management has determined
that the Company now operates in one operating segment with one reporting segment as of January 31, 2023 and July 31, 2022, which is the
consulting service business.
 
 Risks and Uncertainty 
 
 (a) 
 Credit risk 

 Financial instruments that potentially
subject the Company to significant concentration of credit risk primarily cash, accounts receivables and due from buyers of LGC. The carrying amounts of cash
represent the maximum exposure to credit risk. As of January 31, 2023 and July 31, 2022, the Company had cash of $ 0.8 million and
$ 1.8 million, respectively, which is mainly held in cash and demand deposits with several financial institutions in the United
States. In the event of bankruptcy of one of these financial institutions, the Company may not be able to claim its cash and demand
deposits back in full. The Company continues to monitor the financial strength of the financial institutions.
 
 Accounts receivable are typically unsecured and
denominated in USD, derived from revenue earned from customers, which are exposed to credit risk. The risk is mitigated by credit evaluations
the Company performs on its customers and its ongoing monitoring process of outstanding balances. Refer to major customers and supplying
channels below for detail.
 
 The balance of due from buyers of LGC are unsecured
and dominated in USD, derived from sales of equity interest in LGC (Note 4) to three buyers which are exposed to credit risk. The risk
is mitigated by credit evaluations the Company performs on these buyers and its ongoing monitoring process of outstanding balances.
 
 (b) 
 Concentration risk 

 Accounts receivable are typically unsecured and
derived from revenue earned from customers, thereby exposed to credit risk. The risk is mitigated by the Company’s assessment of
its customers’ creditworthiness and its ongoing monitoring of outstanding balances.
 
 The Company has a concentration of its revenues
and receivables with specific customers. For the three months ended January 31, 2023, three customers accounted for 34 %, 34 % and 32 % of
the Company’s consolidated revenue. For the three months ended January 31, 2022, one customer
accounted for 100 % of the Company’s total revenue. 
 
 For the six months ended January 31, 2023, four 
customers accounted for 30 %, 30 %, 27 % and 14 % of the Company’s consolidated revenue. For the
six months ended January 31, 2022, one customer accounted for 95 % of the Company’s total revenue. 
 
 As of January 31, 2023, three customers accounted
for 18 %, 36 % and 39 % of accounts receivable. As of July 31, 2022, the Company had no accounts receivables due from third parties. In addition,
as of January 31, 2023 and July 31, 2022, the Company also had one related party which accounted for 100 % of accounts receivable due from
related parties.
 
 For the three and six months ended January 31,
2023 and 2022, substantially all of the Company’s revenues was generated from providing going public related consulting services
to customers. The risk is mitigated by the Company’s plan to transition its consulting services from the PRC based customers to
more international customers.
 
 (c) 
 Other risks and uncertainties 

 The Company’s business, financial condition
and results of operations may also be negatively impacted by risks related to natural disasters, extreme weather conditions, health epidemics
and other catastrophic incidents, which could significantly disrupt the Company’s operations.
 
 The Company’s operations have been affected
by the outbreak and spread of the coronavirus disease 2019 (COVID-19), which in March 2020, was declared a pandemic by the World
Health Organization. The COVID-19 outbreak is causing lockdowns, travel restrictions, and closures of businesses. The Company’s
businesses have been negatively impacted by the COVID-19 coronavirus outbreak to a certain extent. Some of the Company’s existing
customers have experienced financial distress and disruption of business, which resulted in delay or default on their payments.
 
 Nevertheless, the continued uncertainties associated
with COVID 19 may cause the Company’s revenue and cash flows to underperform in the next 12 months. A resurgence could negatively
affect the execution of the going public consulting service agreements and the collection of the payments from customers. The extent of
the future impact of COVID-19 is still highly uncertain and cannot be predicted as of the financial statement reporting date.
 
 F- 12 

 ATIF HOLDINGS LIMITED 
 
 NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS 
 
 NOTE 4 – DUE FROM BUYERS OF LEAPING
GROUP CORPORATION (“LGC”) 
 
 On January 29, 2021, the Company completed a disposition
of 51.2 % of the equity interest of LGC. The Company sold all of its shares of LGC to Jiang Bo, Jiang Tao and Wang Di (collectively, the
“Buyers”) in exchange for (i) 1,111,110 ordinary shares of the Company owned by the Buyers and (ii) payment by the Buyers
in the amount of $ 2,300,000 plus interest at an interest rate of 10 % per annum on the unpaid amount if the principal amount of $ 2,300,000 
is not paid by January 14, 2022. All principal and accrued and unpaid interest were due on January 14, 2023. As of January 31, 2023 and
July 31, 2022, the balances of due from buyers of LGC was comprised of the following:
 
 January 31, 
 2023 
 July 31,
 2022 

 (unaudited) 
 
 Principal 
 $ 2,300,000 
 $ 2,300,000 

 Interest 
 354,767 
 354,767 

 Total 
 $ 2,654,767 
 $ 2,654,767 

 As of the date of this report, the buyers delayed
in repayments of outstanding balances to the Company as they were affected by the COVID-19. Assessing the payment ability and payment
intension of these buyers, the Company expected to collect the outstanding balances in the next twelve months. However the Company did
not accrue interest income for the six months ended January 31, 2023 until it collected the amount.
 
 NOTE
5 – PREPAID EXPENSES AND OTHER CURRENT ASSETS 
 
 Prepaid expenses and other current assets consisted
of the following:
 
 January 31, 
 2023 
 July 31,
 2022 

 (unaudited) 
 
 Prepayment for advertising service fee (a) 
 $ 552,000 
 $ 600,000 

 Due from the buyer of ATIF GP 
 50,000 
 -
 
 Advance to vendors 
 10,000 
 10,000 

 Others 
 26,979 
 41,210 

 Total 
 $ 638,979 
 $ 651,210 

 (a) Prepayment for advertising services represent the advance payments made by the Company to a third party advertising company for promotion services. These prepayments are typically expensed over the period when the services are performed. 
 
 NOTE 6 – PROPERTY, PLANT AND EQUIPMENT,
NET 
 
 Property and equipment, net, consisted of the following:
 
 January 31, 
 2023 
 July 31,
 2022 

 (unaudited) 
 
 Furniture, fixtures and equipment 
 $ 226,371 
 $ 218,231 

 Vehicles 
 132,670 
 132,670 

 Total 
 359,041 
 350,901 

 Less: accumulated depreciation 
 ( 111,512 ) 
 ( 78,201 ) 

 Property and equipment, net 
 $ 247,529 
 $ 272,700 

 Depreciation expense was $ 16,655 and $ 36,407 for
the three months ended January 31, 2023 and 2022, respectively. Depreciation expense was $ 33,311 and $ 62,751 for the six months ended
January 31, 2023 and 2022, respectively.
 
 NOTE 7 – INTANGIBLE ASSETS 
 
 Net intangible assets consisted of the following:
 
 January 31, 
 2023 
 
 July 31, 
 2022 
 
 (unaudited) 
 
 Financial and news platform 
 $ 56,250 
 $ 56,250 

 Software 
 320,000 
 320,000 

 Total 
 376,250 
 376,250 

 Less: accumulated amortization 
 ( 262,919 ) 
 ( 222,919 ) 

 Intangible assets 
 $ 113,331 
 $ 153,331 

 Amortization expense was $ 20,000 and $ 20,000 for
the three months ended January 31, 2023 and 2022, respectively. Amortization expense was $ 40,000 and $ 40,000 for the six months ended
January 31, 2023 and 2022, respectively.
 
 F- 13 

 ATIF HOLDINGS LIMITED 
 
 NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS 
 
 NOTE 8 – INVESTMENTS IN TRADING SECURITIES 
 
 As of January 31, 2023 and July 31, 2022,
the balance of investments in trading securities represented certain equity securities of listed companies purchased through various
open market transactions by the Company during the relevant periods. The investments are initially recorded at cost, and
subsequently measured at fair value with the changes in fair value recorded in other income (expenses), net in the unaudited
condensed consolidated statement of operations and comprehensive income (loss). For the three months ended January 31, 2023 and 2022,
the Company recorded an increase in fair value of $ 39,120 and a decrease in fair value of $ 454,555 , respectively. For the six months
ended January 31, 2023 and 2022, the Company recorded an increase in fair value of $ 19,116 and a decrease in fair value of $ 793,929 ,
respectively.
 
 Investments in trading securities consisted of
the following:
 
 January 31, 
 2023 
 July 31,
 2022 

 (unaudited) 
 
 Trading securities invested by ATIF 
 $ 73,627 
 $ 12,740 

 Trading securities invested by ATIF LP 
 -
 
 20,606 

 $ 73,627 
 $ 33,346 

 NOTE 9 – LONG-TERM INVESTMENT 
 
 As of January 31, 2022 and July 31, 2022, the
long-term investment represented equity investment without readily determinable fair value measured at measurement alternative and consisted
of the following:
 
 January 31, 
 2023 
 July 31,
 2022 

 (unaudited) 
 
 Solarever Tecnologia de America S.A. de C.V. (“Solarever”) (a) 
 $ -
 
 $ 185,000 

 Armstrong Logistic Inc. (“Armstrong”) (b) 
 -
 
 150,000 

 $ -
 
 $ 335,000 

 (a) In April 2022, ATIF Investment entered into an equity investment agreement with Solarever, pursuant to which the Company would make investment of $ 2 million in exchange of 5.25 % equity interest in Solarever. The investment was solely used to cover professional and legal fees during going public by Solarever. As of July 31, 2022, ATIF Investment had investment of $ 185,000 , or 0.49 %, respectively, over equity interest in Solarever. The Company accounted for the investment in privately held company using the measurement alternative at cost, less impairment, with subsequent adjustments for observable price changes resulting from orderly transactions for identical or similar investments of the same issuer. As of July 31, 2022, the Company did not identify orderly transactions for similar investments of the investee, or any impairment indicators, and the Company did not record upward or downward adjustments or impairment against the investment.
 
 During the six months ended January 31, 2023, the Company determined to focus on financial consulting services to its customers and sold the long-term investment to a third party investment company at cost. In return, the Company provided financial consulting services to the investment company for going public of Solarever.
 
 As of January 31, 2023, the Company had no investment in Solarever.
 
 F- 14 

 ATIF HOLDINGS LIMITED 
 
 NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS 
 
 NOTE 9 – LONG-TERM INVESTMENT (continued) 
 
 (b) In May 2022, ATIF Investment entered into an equity investment agreement with Armstrong, pursuant to which the Company would make investment of $ 2 million in exchange of 12 % equity interest in Armstrong. The investment was solely used to cover professional and legal fees during going public by Armstrong. As of July 31, 2022, ATIF Investment made investment of $ 150,000 or 0.90 % over equity interest in Armstrong. The Company accounted for the investment in privately held company using the measurement alternative at cost, less impairment, with subsequent adjustments for observable price changes resulting from orderly transactions for identical or similar investments of the same issuer. As of July 31, 2022, the Company did not identify orderly transactions for similar investments of the investee, or any impairment indicators, and the Company did not record upward or downward adjustments or impairment against the investment.
 
 During the six months ended January 31, 2023, the Company determined to focus on financial consulting services to its customers and sold the long-term investment to a third party investment company at cost. In return, the Company provided financial consulting services to the investment company for going public of Armstrong.
 
 As of January 31, 2023, the Company had no investment in Armstrong.
 
 NOTE 10 – OPERATING LEASES 
 
 The Company leases offices space under non-cancelable
operating leases, with lease terms ranging between 14 months to 60 months. The Company’s lease agreements do not contain any material
residual value guarantees or material restrictive covenants. Rent expense for the three months ended January 31, 2023 and 2022 was $ 130,169 
and $ 115,149 , respectively. Rent expense for the six months ended January 31, 2023 and 2022 was $ 250,861 and $ 271,240 , respectively.
 
 Effective August 1, 2019, the Company adopted
the new lease accounting standard using a modified retrospective transition method, which allows the Company not to recast comparative
periods presented in its consolidated financial statements. In addition, the Company elected the package of practical expedients, which
allows the Company to not reassess whether any existing contracts contain a lease, to not reassess historical lease classification as
operating or finance leases, and to not reassess initial direct costs. The Company has not elected the practical expedient to use hindsight
to determine the lease term for its leases at transition. The Company combines the lease and non-lease components in determining the ROU
assets and related lease obligation. Adoption of this standard resulted in the recording of operating lease ROU assets and corresponding
operating lease liabilities as disclosed below. ROU assets and related lease obligations are recognized at commencement date based on
the present value of remaining lease payments over the lease term. 
 
 F- 15 

 ATIF HOLDINGS LIMITED 
 
 NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS 
 
 NOTE 10 – OPERATING LEASES (continued) 
 
 The following table presents the operating lease
related assets and liabilities recorded on the unaudited condensed consolidated balance sheets as of January 31, 2023 and July 31,
2022.
 
 January 31, 
 2023 
 July 31,
 2022 

 (unaudited) 
 
 Right-of- use assets, net 
 $ 1,280,746 
 $ 1,383,464 

 Operating lease liabilities, current 
 511,373 
 433,061 

 Operating lease liabilities, noncurrent 
 826,070 
 985,249 

 Total operating lease liabilities 
 $ 1,337,443 
 $ 1,418,310 

 The weighted average remaining lease terms and
discount rates for all of operating leases were as follows as of January 31, 2023 and July 31, 2022: 
 
 January 31, 
 2022 
 July 31,
 2022 

 (unaudited) 
 
 Remaining lease term and discount rate 
 
 Weighted average remaining lease term (years) 
 3.63 
 3.95 

 Weighted average discount rate 
 4.90 % 
 4.90 % 

 The following is a schedule of maturities of lease
liabilities as of January 31, 2023 and July 31, 2022:
 
 January 31, 
 2023 
 July 31,
 2022 

 (unaudited) 
 
 For the six months/twelve months ended July 31, 2023 
 $ 301,882 
 $ 492,969 

 For the twelve months ended July 31, 2024 
 417,708 
 390,468 

 For the twelve months ended July 31, 2025 
 267,239 
 240,000 

 For the twelve months ended July 31, 2026 
 267,239 
 240,000 

 For the twelve months ended July 31, 2027 and thereafter 
 204,540 
 200,000 

 Total lease payments 
 1,458,608 
 1,563,438 

 Less: imputed interest 
 ( 121,165 ) 
 ( 145,128 ) 

 Present value of lease liabilities 
 $ 1,337,443 
 $ 1,418,310 

 F- 16 

 ATIF HOLDINGS LIMITED 
 
 NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS 
 
 NOTE 11 – ACCRUED EXPENSES AND OTHER
CURRENT LIABILITIES 
 
 Accrued expenses and other current liabilities consisted of the following:
 
 January 31, 
 2023 
 July 31,
 2022 

 (unaudited) 
 
 Investment securities payable (a) 
 $ -
 
 $ 1,466,490 

 Due to third parties (b) 
 993,113 
 500,000 

 Accrued legal consulting expenses 
 84,823 
 125,676 

 Accrued payroll expenses 
 174,298 
 51,623 

 Others 
 87,632 
 130,982 

 $ 1,339,866 
 $ 2,274,771 

 (a) During the year ended July 31, 2022, ATIF LP borrowed certain investment securities from an investment bank as a trading strategy. As of July 31, 2022, the balance represented the fair value of investment securities owned to the investment bank. On August 1, 2022, the Company disposed of ATIF GP, and ceased to be the investment manager of ATIF LP, and the balance of investment securities payable decreased zero as of January 31, 2023. 
 
 (b) As of July 31, 2022, the balance due to third parties represented the proceeds collected from certain third parties, which subscribed portion of the Company’s long-term investments. Because the purchase was not closed and the Company recorded the proceeds in the account of accrued expenses and other current liabilities. 
 
 During the six months ended January 31, 2023, the Company sold the long-term investment to a third party. As of January 31, 2023, the balance due to third parties represented the proceeds collected from investees who subscribed for the long-term investments and payable to the third party.
 
 NOTE 12 – RELATED PARTY TRANSACTIONS 
 
 On May 31, 2022, Huaya became a related party
of the Company upon transfer of equity interest in Huaya to Mr. Pishan Chi, who was a former CEO of the Company. In May 2022, Huaya engaged
the Company to provide consulting services for its customers. As of January 31, 2023 and July 31, 2022, the Company had accounts receivable
of $ 762,000 and $ 762,000 due from Huaya.
 
 For the three months ended January 31, 2022, the
Company did not enter into related party transactions.
 
 For the six months ended January 31, 2022, the
Company make loans of $ 100,000 to Huaya to support its operations. The loans were interest free and was repayable on demand. As of January
31, 2023, the Company had loans due from Huaya of $ 98,500 , which was recorded in the account of “due from a related party”.
 
 F- 17 

 ATIF HOLDINGS LIMITED 
 
 NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS 
 
 NOTE 13 – TAXES 
 
 The Company is subject to income taxes on an entity
basis on income arising in or derived from the tax jurisdiction in which each entity is domiciled.
 
 British Virgin Islands 
 
 Under the current laws of the British Virgin Islands,
the Company and ATIF Investment are not subject to tax on income or capital gains in the British Virgin Islands. Additionally, upon payments
of dividends to the shareholders, no British Virgin Islands withholding tax will be imposed.
 
 Hong Kong 
 
 ATIF HK is subject to Hong Kong profits tax at
a rate of 16.5 %. However, ATIF HK did not generate any assessable profits arising in or derived from Hong Kong for the three and six months
ended July 31, 2023 and 2022, and accordingly no provision for Hong Kong profits tax has been made in these periods.
 
 PRC 
 
 The PRC Corporate Income Tax (“CIT”)
is calculated based on the taxable income determined under the applicable CIT Law and its implementation rules, which became effective
on January 1, 2008. CIT Law imposes a unified income tax rate of 25 % for all resident enterprises in China, including both domestic
and foreign invested enterprises. Huaya qualifies as a Small and Low Profit Enterprise, and is subject to a preferential EIT of 10 %.
 
 USA 
 
 For the US jurisdiction, ATIF Inc., ATIF GP, ATIF
LP, ATIF BD, ATIF BC and ATIF BM are subject to federal and state income taxes on its business operations. The federal tax rate is 21 %
and state tax rate is 8.84 %. The Company also evaluated the impact from the recent tax reforms in the United States, including the Coronavirus
Aid, Relief, and Economic Security Act (“CARES Act”) and Health and Economic Recovery Omnibus Emergency Solutions Act (“HERO
Act”), which both were passed in 2020, no material impact on the Company is expected based on the analysis. The Company will
continue to monitor the potential impact going forward. 
 
 For the three and six months ended January 31,
2023, the Company recorded current income tax expenses of $ 0.6 million which arose from net income earned by ATIF BC. For the three and
six months ended January 31, 2022, the Company did not recorded current or deferred income tax expenses.
 
 F- 18 

 ATIF HOLDINGS LIMITED 
 
 NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS 
 
 NOTE 13 – TAXES (continued) 
 
 Deferred tax assets 
 
 The Company’s deferred tax assets are comprised
of the following:
 
 January 31, 
 2023 
 
 July 31, 
 2022 
 
 (unaudited) 
 
 Deferred tax assets: 
 
 Allowance for doubtful account 
 $ -
 
 $ 105,059 

 Net operating loss carry forwards 
 1,760,379 
 1,563,354 

 Deferred tax assets before valuation allowance 
 1,760,379 
 1,668,413 

 Less: valuation allowance 
 ( 1,760,379 ) 
 ( 1,668,413 ) 

 Net deferred tax assets 
 $ -
 
 $ -
 
 The Company follows ASC 740, “Income
Taxes”, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events
that have been included in the financial statements or tax returns. Under this method, deferred income taxes are recognized for the tax
consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts at each
period end based on enacted tax laws and statutory tax rates, applicable to the periods in which the differences are expected to affect
taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.
 
 The Company’s deferred tax assets primarily
derived from the net operating loss (“NOL”) and allowance for doubtful accounts. The Company periodically evaluates the likelihood
of the realization of deferred tax assets, and reduces the carrying amount of the deferred tax assets by a valuation allowance to the
extent it believes a portion or all of the deferred tax assets will not be realized. The Company considers many factors when assessing
the likelihood of future realization of the deferred tax assets, including its recent cumulative earnings experience, expectation of future
income, the carry forward periods available for tax reporting purposes, and other relevant factors. As of January 31, 2023 and July 31,
2022, management believes that the realization of the deferred tax assets appears to be uncertain and may not be realizable in the near
future. Therefore, a 100 % valuation allowance has been provided against the deferred tax assets.
 
 Uncertain tax positions 
 
 The Company accounts for uncertainty in income
taxes using a two-step approach to recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position for
recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained
on audit, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the
largest amount that is more than 50% likely of being realized upon settlement. Interest and penalties related to uncertain tax positions
are recognized and recorded as necessary in the provision for income taxes. The Company is subject to income taxes in the PRC. According
to the PRC Tax Administration and Collection Law, the statute of limitations is three years if the underpayment of taxes is due to computational
errors made by the taxpayer or the withholding agent. The statute of limitations is extended to five years under special circumstances,
where the underpayment of taxes is more than RMB 100,000. In the case of transfer pricing issues, the statute of limitation is ten years.
There is no statute of limitation in the case of tax evasion. There were no uncertain tax positions as of January 31, 2023 and July 31,
2022 and the Company does not believe that its unrecognized tax benefits will change over the next twelve months. 
 
 F- 19 

 ATIF HOLDINGS LIMITED 
 
 NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS 
 
 NOTE 14
– CONTIGENCIES 
 
 From time to time, the Company is a party to various
legal actions arising in the ordinary course of business. The Company accrues costs associated with these matters when they become probable
and the amount can be reasonably estimated. Legal costs incurred in connection with loss contingencies are expensed as incurred.
 
 Pending Legal Proceeding with Boustead Securities, LLC (“Boustead”) 

 On May 14, 2020, Boustead filed a lawsuit
against the Company and LGC for breaching the underwriting agreement Boustead had with each of the Company and LGC, in which Boustead
was separately engaged as the exclusive financial advisor to provide financial advisory services to the Company and LGC.
 
 In April 2020, the Company acquired 51.2 %
equity interest in LGC after LGC terminated its efforts to launch an IPO on its own. Boustead alleged that the acquisition transaction
between the Company and LGC was entered into during the lockup period of the exclusive agreement between Boustead and LGC, and therefore
deprived Boustead of compensation that Boustead would otherwise have been entitled to receive under its exclusive agreement with LGC.
Therefore, Boustead is attempting to recover from the Company an amount equal to a percentage of the value of the transaction it conducted
with LGC.
 
 Boustead’s Complaint alleges four causes
of action against the Company, including breach of contract; breach of the implied covenant of good faith and fair dealing; tortious interference
with business relationships and quantum meruit.
 
 On October 6, 2020, ATIF filed a motion to dismiss
Boustead’s Complaint pursuant to Federal Rule of Civil Procedure 12(b)(6) and 12(b)(5). On October 9, 2020, the United States
District Court for the Southern District of New York directed Boustead to respond to the motion or amend its Complaint by November 10,
2020. Boustead opted to amend its complaint and filed the amended complaint on November 10, 2020. Boustead’s amended
complaint asserts the same four causes of action against ATIF and LGC as its original complaint. The Company filed another motion to dismiss
Boustead’s amended complaint on December 8, 2020.
 
 On August 25, 2021, the United States District
Court for the Southern District of New York granted ATIF’s motion to dismiss Boustead’s first amended complaint. In its order
and opinion, the United States District Court for the Southern District of New York allowed Boustead to move for leave to amend its causes
of action against ATIF as to breach of contract and tortious interference with business relationships, but not breach of the implied covenant
of good faith and fair dealing and quantum meruit. On November 4, 2021, Boustead filed a motion seeking leave to file a second amended
complaint to amend its cause of action for Breach of Contract. The Court granted Boustead’s motion for leave and Boustead filed
the second amended complaint on December 28, 2021 alleging only breach of contract and dropping all other causes of action alleged in
the original complaint. On January 18, 2022, the Company filed a motion to dismiss Boustead’s second amended complaint. Boustead
filed its opposition on February 1, 2022 and the Company replied on February 8, 2022.
 
 On July 6, 2022, the Court denied our motion to
dismiss the second amended complaint. Thereafter, on August 3, 2022, the Company filed a motion to compel arbitration of Boustead’s
claims in California. Briefing on the Company’s motion to compel concluded on August 23, 2022. The Court has yet to rule on that
motion. Boustead is also seeking a default judgment against LGC and recently filed an order to show cause for default judgment against
LGC. The Court has not ruled on Boustead’s request for entry of default judgment against LGC.
 
 ATIF is currently evaluating how it will respond
to Boustead’s motion for leave. In sum, the Boustead litigation is currently in the pleadings stage. Our management believes it
is premature to assess and predict the outcome of this pending litigation.
 
 F- 20 

 ITEM 2. MANAGEMENT’S DISCUSSION AND
ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 
 
 The following discussion and analysis should
be read together with the Company’s annual report on Form 10-K for the fiscal year ended July 31, 2022 and the audited consolidated
financial statements and notes included therein (collectively, the “2022 Annual Report”), as well as the Company’s
unaudited condensed consolidated financial statements and the related notes included in this report. Pursuant to Instruction 2 to paragraph
(b) of Item 303 of Regulation S-K promulgated by the SEC, in preparing this discussion and analysis, the Company has presumed that readers
have access to and have read the disclosure under the same heading contained in the 2022 Annual Report. This discussion and analysis
contains forward-looking statements. Please see the cautionary note regarding these statements at the beginning of this report. 
 
 Business Overview 
 
 We offer financial consulting
services to small and medium-sized enterprise customers in Asia and North America. Our goal is to become an international financial consulting
company with clients and offices throughout Asia. Since our inception in 2015, the focus of our consulting business has been providing
comprehensive going public consulting services designed to help SMEs become public companies on suitable markets and exchanges. 
 
 On January 4, 2021,
we established an office in California, USA, through our wholly owned subsidiary ATIF Inc., a California corporation, and launched, in
addition to our business consulting services, additional service models consisting of asset management, investment holding and media
services to expand our business with a flexible business concept to achieve a goal of high growth revenue and strong profit growth.
 
 Reverse Split 
 
 On August 12, 2021, our Board
of Directors approved a reverse stock split (the “Reverse Split”) of our issued and outstanding ordinary shares, par value
$0.001 per share, at a ratio of 1 -for-5so that every five (5) shares issued and outstanding on the date of the Reverse Split was combined
into one (1) ordinary share, US$0.005 par value. Shareholders otherwise entitled to receive a fractional share as a result of the reverse
stock split will receive a whole share in lieu of such factional share, as relevant. Both before and after completion of the Reverse
Split, the Company is and will be authorized to issue 100,000,000,000 ordinary shares of US$0.001 par value each. As a result of the Reverse
Split, the Company’s issued and outstanding ordinary shares was reduced from 45,806,952 ordinary shares of US$0.001 par value each
to approximately 9,161,390 ordinary shares of par value $0.005 per share. On August 23, 2021, we amended our Memorandum of Association
and Articles of Association in connection with our one -for- five reverse stock split to amend the par value back to $0.001 per ordinary
share. Our ordinary shares, as adjusted per the Reverse Split, began trading on the Nasdaq Capital Market on August 30, 2021.
 
 Recent Updates 
 
 On October 3, 2022, ATIF
established ATIF Southern LLC under the laws of California of the United States. On October 6 and October 7, 2022, ATIF Inc., a wholly
owned subsidiary of ATIF, established ATIF Business Consulting LLC (“ATIF BC”) and ATIF Business Management LLC (“ATIF
BM”) under the laws of California of the United States, respectively.
 
 On August 1, 2022, ATIF
USA entered into and closed a Sale and Purchase Agreement (the “Agreement”) with Asia Time (HK) International Finance Service
Limited (the “Buyer”), pursuant to which the Company sold all of its equity interest in ATIF GP for cash consideration of
US$50,000 (the “Agreement”). The management believed the disposition does not represent a strategic shift because it is not
changing the way it is running its business. The Company has not shifted the nature of its operations. The termination is not accounted
as discontinued operations in accordance with ASC 205-20. Upon the closing of the Agreement, ATIF GP is no longer our subsidiary and
ATIF USA ceased to be the investment manager of ATIF LP.
 
 As of January 31, 2023,
we had one reporting segment, which is the provision of financial consulting services.
 
 2 

 Our financial
consulting services 
 
 Currently we provide consulting services to the companies based in North
America seeking listing in U.S.. We launched our consulting
services in 2015. Our aim was to assist Chinese enterprises by filling the gaps and forming a bridge between PRC companies and
overseas stock markets and exchanges. We have a team of qualified and experienced personnel with legal, regulatory, and language expertise
in several jurisdictions outside the U.S. Our services were designed to help SMEs in China achieve their goal of becoming public companies.
In May 2022, we shifted our geographic focus from China to North America emphasizing on helping mid and small companies in North America
become public companies on the U.S. capital markets. We would create a going public strategy for each client based on many factors of
such client, including our assessment of the client’s financial and operational situations, market conditions, and the client’s
business and financing requirements. Since our inception and up to the date of this report, we have successfully helped three Chinese
enterprises to be quoted on the U.S. OTC markets and are currently assisting our other clients in their respective going public efforts.
Most of our current and past clients have been Chinese, U.S. and Mexican companies, and we plan to expand our operations to other Asian
countries, such as Malaysia, Vietnam, and Singapore with continuing focus on the North American market in the coming years.
 
 For the six months ended
January 31, 2023 and 2022, we provided consulting services to four and one customer, respectively, which primarily engaged the Company
to provide consulting services relating to going public in the US through IPO and reverse merger. On May 31, 2022, we completed the transfer
of our equity interest in ATIF HK and Huaya, through which we provided consulting services to Chinese companies We plan to focus on providing
consulting services to customers based in North America and other areas and intend to continue cooperating with Huaya in connection with
the expansion and provision of our business services in China. From April 2022 through the date of this report, the Company entered into
consulting agreements with five customers, among which four are based in the North America.
 
 Our total revenue generated
from consulting services amounted to $1.9 million and minimal for the three months ended January 31, 2023 and 2022, respectively. Our
total revenue generated from consulting services amounted to $2.2 million and $0.5 million for the six months ended January 31, 2023
and 2022, respectively.
 
 Key Factors that Affect our Business 
 
 We believe the following
key factors may affect our consulting services:
 
 Our business success depends on our
ability to acquire customers effectively. 
 
 Our customer acquisition
channels primarily include our sales and marketing campaigns and existing customer referrals. In order to acquire customers, we have
made significant efforts in building mutually beneficial long-term relationships with local government, academic institutions, and local
business associations. In addition, we also market our consulting services through social media, such as WeChat and Weibo. If any of
our current customer acquisition channels becomes less effective, we are unable to continue to use any of these channels or we are not
successful in using new channels, we may not be able to attract new customers in a cost-effective manner or convert potential customers
into active customers or even lose our existing customers to our competitors. To the extent that our current customer acquisition and
retention efforts become less effective, our service revenue may be significantly impacted, which would have a significant adverse effect
on our revenues, financial condition, and results of operations.
 
 Our consulting business faces strong
market competition. 
 
 We are currently facing
intense market competition. Some of our current or potential competitors have significantly more financial, technical, marketing, and
other resources than we do and may be able to devote greater resources to the development, promotion, and support of their customer acquisition
and retention channels. In light of the low barriers to entry in the financial consulting industry, we expect more players to enter this
market and increase the level of competition. Our ability to differentiate our services from other competitors will have significant
impact on our business growth in the future.
 
 Our business depends on our ability
to attract and retain key personnel. 
 
 We rely heavily on the
expertise and leadership of our directors and officers to maintain our core competence. Under their leadership, we have been able to
achieve rapid expansion and significant growth since our inception in 2015. As our business scope increases, we expect to continue to
invest significant resources in hiring and retaining a deep talent pool of financial consultancy professionals. Our ability to sustain
our growth will depend on our ability to attract qualified personnel and retain our current staff.
 
 3 

 Results of Operations 
 
 Comparison of Operation Results for the
Three Months ended January 31, 2023 and 2022 
 
 The following table summarizes the results of
our operations for the three months ended January 31, 2023 and 2022, respectively, and provides information regarding the dollar and
percentage increase or (decrease) during such periods.
 
 For the Three Months ended 
 Changes 

 January 31,
 2023 
 January 31,
 2022 
 Amount
 Increase
 (Decrease) 
 Percentage
 Increase
 (Decrease) 

 (unaudited) 
 (unaudited) 
 
 Revenues 
 $ 1,900,000 
 $ 7,680 
 $ 1,892,320 
 24,640 % 

 Operating expenses: 
 
 Selling expenses 
 (48,000 ) 
 - 
 (48,000 ) 
 100 % 

 General and administrative expenses 
 (581,112 ) 
 (827,100 ) 
 308,988 
 (37 )% 

 Total operating expenses 
 (566,112 ) 
 (827,100 ) 
 260,988 
 (32 )% 

 Income (loss) from operations 
 1,333,888 
 (819,420 ) 
 2,153,308 
 (263 )% 

 Other income (expenses): 
 
 Interest (expenses) income, net 
 (57,973 ) 
 25 
 (57,998 ) 
 (231,992 )% 

 Other income (expenses), net 
 62,903 
 (80,219 ) 
 143,122 
 (178 )% 

 Income (loss) from investment in trading securities 
 39,120 
 (454,555 ) 
 493,675 
 (109 )% 

 Total other income (expenses), net 
 44,050 
 (534,749 ) 
 578,799 
 (108 )% 

 Income (loss) before income taxes 
 1,377,938 
 (1,354,169 ) 
 2,732,107 
 (202 )% 

 Income tax provision 
 (566,957 ) 
 - 
 (566,957 ) 
 100 % 

 Net income (loss) 
 $ 810,981 
 $ (1,354,169 ) 
 $ 2,165,150 
 (160 )% 

 Revenues. Our
total revenue increased by $1.9 million from $7,680 in the quarter ended January 31, 2022, to $1.9 million in quarter ended January 31,
2023. During the three months ended January 31, 2023, we provided consulting services to four customers, while during the same period
ended January 31, 2022, we earned securities management fee income.
 
 Selling expenses. Selling
expenses increased from $nil in the quarter ended January 31, 2022 to $48,000 in the quarter ended
January 31, 2023. Our selling expenses primarily consisted of outsourced service fees charged by third-party service providers, business
development expenses, potential customer referral commissions, salary and welfare expenses of our business development team, and business
travel expenses. The increase in our selling expenses was primarily due to a reversal of consulting service fees because we over accrued
the outsourced professionals service fees for the quarter ended January 31, 2022.
 
 As a percentage of sales,
our absolute amount of selling expenses were negative 3% and 0% of our total revenues for the three months ended January 31,
2023 and 2022, respectively.
 
 General and administrative
expenses. Our general and administrative expenses decreased by $0.3 million, or 37%, from $0.8 million in the quarter ended
January 31, 2022 to $0.5 million in the same period of 2023. Our general and administrative expenses primarily consisted of salary and
welfare expenses of management and administrative team, office expenses, operating lease expenses, and professional fees such as audit
and legal fees. The increase was mainly due to the decrease of expenses as a result of disposal of ATIF HK and termination of Qianhai
VIE Agreement.
 
 4 

 As a percentage of sales,
our general and administrative expenses were 27% and 10,770% of our total revenues for the three months ended January 31, 2023 and 2022,
respectively.
 
 Gain (loss) from
investment in trading securities. Gain (loss) from investments in trading securities represented unrealized gains or losses
from investment in trading securities, which was measured at market price. For the three months ended January 31, 2023 and 2022, the
Company recorded a gain from investment in trading securities of $39,120 and a loss from investment in trading securities of $0.5 million,
respectively.
 
 Income taxes. We
are incorporated in the British Virgin Islands. Under the current laws of the British Virgin Islands, we are not subject to tax on income
or capital gains in the British Virgin Islands. Additionally, upon payments of dividends to the shareholders, no British Virgin Islands
withholding tax will be imposed.
 
 ATIF HK is subject to
Hong Kong profits tax at a rate of 16.5%. However, ATIF HK did not have any assessable profits arising in or derived from Hong Kong for
the three months ended January 31, 2022, and accordingly no provision for Hong Kong profits tax had been made in these periods.
 
 Huaya was incorporated
in the PRC. Under the Income Tax Laws of the PRC, Huaya is subject to income tax at a rate of 10% under the preferential tax treatment
to Smaller-scale Taxpayers.
 
 ATIF Inc, ATIF GP, ATIF LP,
ATIF BD, ATIF BC and ATIF BM were established in the U.S and are subject to federal and state income taxes on its business operations.
The federal tax rate is 21% and state tax rate is 8.84%. We also evaluated the impact from the recent tax reforms in the United States,
including the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) and Health and Economic Recovery Omnibus Emergency
Solutions Act (“HERO Act”), which were both passed in 2020, No material impact on the ATIF US is expected based on our analysis.
We will continue to monitor the potential impact going forward.
 
 Income tax expense was
$566,957 for the three months ended January 31, 2023, which arose from net income earned by ATIF BC. Income tax expense was $nil
for the three months ended January 31, 2022 due to significant net operating loss in fiscal year 2022 which resulted in taxable losses.
 
 Net
income (loss). As a result of foregoing,
net income was $0.7 million for the six months ended January 31, 2023, a change of $3.0 million from net loss of $2.3 million for the
six months ended January 31, 2022. 
 
 5 

 Comparison of Operation Results for the
Six Months ended January 31, 2023 and 2022 
 
 The following table summarizes the results of
our operations for the six months ended January 31, 2023 and 2022, respectively, and provides information regarding the dollar and percentage
increase or (decrease) during such periods.
 
 For the Six Months ended 
 Changes 

 January 31,
 2023 
 January 31,
 2022 
 Amount
 Increase
 (Decrease) 
 Percentage
 Increase
 (Decrease) 

 (unaudited) 
 (unaudited) 
 
 Revenues 
 $ 2,200,000 
 $ 524,155 
 $ 1,675,845 
 320 % 

 Operating expenses: 
 
 Selling expenses 
 (53,000 ) 
 (225,113 ) 
 172,113 
 (76 )% 

 General and administrative expenses 
 (1,081,008 ) 
 (1,705,255 ) 
 624,247 
 (37 )% 

 Total operating expenses 
 (1,134,008 ) 
 (1,930,368 ) 
 796,360 
 (41 )% 

 Income (loss) from operations 
 1,065,992 
 (1,406,213 ) 
 2,472,205 
 (176 )% 

 Other income (expenses): 
 
 Interest income, net 
 1,874 
 52 
 1,822 
 3,504 % 

 Other income (expenses), net 
 122,403 
 (53,604 ) 
 176,007 
 (328 )% 

 Income (loss) from investment in trading securities 
 19,116 
 (793,929 ) 
 813,045 
 (102 )% 

 Gain from disposal of subsidiaries 
 56,038 
 - 
 56,038 
 100 % 

 Total other income (expenses), net 
 199,431 
 (847,481 ) 
 1,046,912 
 (124 )% 

 Income (loss) before income taxes 
 1,265,423 
 (2,253,694 ) 
 3,519,117 
 (156 )% 

 Income tax provision 
 (566,957 ) 
 - 
 (566,957 ) 
 100 % 

 Net income (loss) 
 $ 698,466 
 $ (2,253,694 ) 
 $ 2,952,160 
 (131 )% 

 Revenues. Our
total revenue increased by $1.7 million from $0.5 million in the six months ended January 31, 2022, to $2.2 million in six months ended
January 31, 2023. During the six months ended January 31, 2023 and 2022, we provided consulting services to four and one customer, respectively,
leading to higher consulting service fees earned.
 
 Selling expenses. Selling
expenses decreased by $0.2 million, or 76%, from $0.2 million in the six months ended January 31, 2022 to $53,000 in the six months ended
January 31, 2023. Our selling expenses primarily consisted of outsourced service fees charged by third-party service providers, business
development expenses, potential customer referral commissions, salary and welfare expenses of our business development team, and business
travel expenses. The decrease was mainly because of disposal of ATIF HK and termination of Qianhai VIE Agreement.
 
 As a percentage of sales,
our absolute amount of selling expenses were 2% and 43% of our total revenues for the six months ended January 31, 2023 and 2022, respectively.
 
 General and administrative
expenses. Our general and administrative expenses decreased by $0.6 million, or 37%, from $1.7 million in the quarter ended
January 31, 2022 to $1.1 million in the same period of 2023. Our general and administrative expenses primarily consisted of salary and
welfare expenses of management and administrative team, office expenses, operating lease expenses, and professional fees such as audit
and legal fees. The decrease was mainly due to the decrease of expenses as a result of disposal of ATIF HK and termination of Qianhai
VIE Agreement.
 
 As a percentage of sales,
our general and administrative expenses were 49% and 325% of our total revenues for the six months ended January 31, 2023 and 2022, respectively.
 
 6 

 Gain (loss) from
investment in trading securities. Gain (loss) from investments in trading securities represented unrealized gains or losses
from investment in trading securities, which was measured at market price. For the six months ended January 31, 2023 and 2022, the Company
recorded a gain from investment in trading securities of $19,116 and a loss from investment int trading securities of $0.8 million, respectively.
 
 Gain from disposal
of subsidiaries . For the six months ended January 31, 2023, the Company reported a gain of $0.05 million from disposal of ATIF
GP. For six months ended January 31, 2022, the Company did not record gain or loss from disposal of subsidiaries.
 
 Income taxes. We
are incorporated in the British Virgin Islands. Under the current laws of the British Virgin Islands, we are not subject to tax on income
or capital gains in the British Virgin Islands. Additionally, upon payments of dividends to the shareholders, no British Virgin Islands
withholding tax will be imposed.
 
 ATIF HK is subject to
Hong Kong profits tax at a rate of 16.5%. However, ATIF HK did not have any assessable profits arising in or derived from Hong Kong for
the six months ended January 31, 2022, and accordingly no provision for Hong Kong profits tax had been made in these periods.
 
 Huaya was incorporated
in the PRC. Under the Income Tax Laws of the PRC, Huaya is subject to income tax at a rate of 10% under the preferential tax treatment
to Smaller-scale Taxpayers.
 
 ATIF Inc, ATIF GP, ATIF LP,
ATIF BD, ATIF BC and ATIF BM were established in the U.S and are subject to federal and state income taxes on its business operations.
The federal tax rate is 21% and state tax rate is 8.84%. We also evaluated the impact from the recent tax reforms in the United States,
including the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) and Health and Economic Recovery Omnibus Emergency
Solutions Act (“HERO Act”), which were both passed in 2020, No material impact on the ATIF US is expected based on our analysis.
We will continue to monitor the potential impact going forward.
 
 Income tax expense was
$566,957 for the six months ended January 31, 2023, which arose from net income earned by ATIF BC. Income tax expense was $nil for the
six months ended January 31, 2022 due to significant net operating loss in fiscal year 2022 which resulted in taxable losses.
 
 Net income (loss) . As
a result of foregoing, net income was $0.7 million for the six months ended January 31, 2023, a change of $3.0 million from net loss
of $2.3 million for the six months ended January 31, 2022.
 
 Capital Commitments and Contingencies 
 
 We had no material capital
commitments as of January 31, 2023.
 
 From time to time, we
are a party to various legal actions arising in the ordinary course of business. We accrue costs associated with these matters when they
become probable and the amount can be reasonably estimated. Legal costs incurred in connection with loss contingencies are expensed as
incurred.
 
 Pending Legal Proceeding
with Boustead Securities, LLC (“Boustead”) 
 
 On May 14, 2020,
Boustead filed a lawsuit against the us and LGC for breaching the underwriting agreement Boustead had with each of us and LGC, in which
Boustead was separately engaged as the exclusive financial advisor to provide financial advisory services to us and LGC.
 
 In April 2020,
we acquired 51.2% equity interest in LGC after LGC terminated its efforts to launch an IPO on its own. Boustead alleged that the acquisition
transaction between us and LGC was entered into during the lockup period of the exclusive agreement between Boustead and LGC, and therefore
deprived Boustead of compensation that Boustead would otherwise have been entitled to receive under its exclusive agreement with LGC.
Therefore, Boustead is attempting to recover from us an amount equal to a percentage of the value of the transaction it conducted with
LGC.
 
 Boustead’s Complaint
alleges four causes of action against us, including breach of contract; breach of the implied covenant of good faith and fair dealing;
tortious interference with business relationships and quantum meruit.
 
 7 

 On October 6, 2020,
ATIF filed a motion to dismiss Boustead’s Complaint pursuant to Federal Rule of Civil Procedure 12(b)(6) and 12(b)(5). On
October 9, 2020, the United States District Court for the Southern District of New York directed Boustead to respond to the motion or
amend its Complaint by November 10, 2020. Boustead opted to amend its complaint and filed the amended complaint on November 10,
2020. Boustead’s amended complaint asserts the same four causes of action against ATIF and LGC as its original complaint.
We filed another motion to dismiss Boustead’s amended complaint on December 8, 2020.
 
 On August 25, 2021,
the United States District Court for the Southern District of New York granted ATIF’s motion to dismiss Boustead’s first
amended complaint. In its order and opinion, the United States District Court for the Southern District of New York allowed Boustead
to move for leave to amend its causes of action against ATIF as to breach of contract and tortious interference with business relationships,
but not breach of the implied covenant of good faith and fair dealing and quantum meruit. On November 4, 2021, Boustead filed a motion
seeking leave to file a second amended complaint to amend its cause of action for Breach of Contract. The Court granted Boustead’s
motion for leave and Boustead filed the second amended complaint on December 28, 2021 alleging only breach of contract and dropping all
other causes of action alleged in the original complaint. On January 18, 2022, we filed a motion to dismiss Boustead’s second amended
complaint. Boustead filed its opposition on February 1, 2022 and we replied on February 8, 2022.
 
 On July 6, 2022, the
Court denied our motion to dismiss the second amended complaint. Thereafter, on August 3, 2022, we filed a motion to compel arbitration
of Boustead’s claims in California. Briefing on our motion to compel concluded on August 23, 2022. The Court has yet to rule on
that motion. Boustead is also seeking a default judgment against LGC and recently filed an order to show cause for default judgment against
LGC. The Court has not ruled on Boustead’s request for entry of default judgment against LGC.
 
 We are currently evaluating
how it will respond to Boustead’s motion for leave. In sum, the Boustead litigation is currently in the pleadings stage. Our management
believes it is premature to assess and predict the outcome of this pending litigation.
 
 Off-Balance Sheet Commitments and Arrangements 
 
 We have not entered into any financial guarantees
or other commitments to guarantee the payment obligations of any third parties. In addition, we have not entered into any derivative
contracts that are indexed to our shares and classified as shareholder’s equity or that are not reflected in our consolidated financial
statements. Furthermore, we do not have any retained or contingent interest in assets transferred to an unconsolidated entity that serves
as credit, liquidity or market risk support to such entity. We do not have any variable interest in any unconsolidated entity that provides
financing, liquidity, market risk or credit support to us or engages in product development services with us.
 
 Liquidity and Capital Resources 
 
 To date, we have financed our operations primarily
through cash flows from operations, working capital loans from our major shareholders, proceeds from our initial public offering, and
equity financing through public offerings of our securities. We plan to support our future operations primarily from cash generated from
our operations and cash on hand.
 
 Liquidity and Going concern 
 
 For the three and six months ended January 31,
2023, the Company reported a net income of $0.8 million and $0.7 million, respectively. For the three and six months ended January 31,
2022, the Company reported a net loss of $1.4 million and $2.3 million, respectively. For the six months ended January 31, 2023 and 2022,
the Company reported operating cash outflows of $0.7 million and cash inflows of $0.3 million, respectively.
 
 8 

 In assessing the Company’s ability to continue
as a going concern, the Company monitors and analyzes its cash and its ability to generate sufficient cash flow in the future to support
its operating and capital expenditure commitments.
 
 As of January 31, 2023, the Company had cash
of $0.8 million. On the other hand, the Company had current liabilities of $2.5 million. Currently the Company had four service-in-progress
agreements, and expected to collect consulting service fees of $2.4 million for the next 12 months. Due to the impact of COVID-19, some
of our existing customers may experience financial distress or business disruptions, which could lead to potential delay or default on
their payments. Any increased difficulty in collecting accounts receivable, or early termination of our existing consulting service agreements
due to deterioration in economic conditions could further negatively impact our cash flows. Given these factors, our potential customers’
perception and confidence to go public in the United States has been negatively impacted and our operating revenue and cash flows may
continue to underperform in the near terms. Although we had cash of $0.8 million as of January 31, 2023, given the above
mentioned uncertainties, the management believes that the Company will continue as a going concern in the following 12 months from
the date the Company’s unaudited condensed consolidated financial statements are issued.
 
 Currently, the Company intends to finance its
future working capital requirements and capital expenditures from cash generated from operating activities and funds raised from equity
financings.
 
 The accompanying unaudited condensed consolidated
financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction
of liabilities in the ordinary course of business. The financial statements do not include any adjustments relating to the recoverability
and classification of recorded asset amounts or the amounts and classification of liabilities that might result from the outcome of the
uncertainties described above.
 
 We have not declared nor paid any cash dividends to
our shareholders. We do not plan to pay any dividends out of our restricted net assets in the near future.
 
 We have limited financial obligations denominated
in U.S. dollars, thus the foreign currency restrictions and regulations in the PRC on the dividends distribution will not have a material
impact on our liquidity, financial condition, and results of operations.
 
 The following table sets forth summary of our
cash flows for the years indicated:
 
 For the Six Months Ended
 January 31, 

 2023 
 2022 

 (unaudited) 
 (unaudited) 

 Net cash (used in) provided by operating activities 
 $ (754,714 ) 
 $ 328,160 

 Net cash used in investing activities 
 (166,036 ) 
 (2,094,308 ) 

 Net cash used in financing activities 
 - 
 (39,642 ) 

 Effect of exchange rate changes on cash 
 - 
 (71,672 ) 

 Net decrease in cash 
 (920,750 ) 
 (1,877,462 ) 

 Cash, beginning of period 
 1,750,137 
 5,596,740 

 Cash, end of period 
 $ 829,387 
 $ 3,719,278 

 9 

 Operating Activities 
 
 Net cash used in operating activities was $0.8
million in the six months ended January 31, 2023. Net cash used in operating activities was primarily comprised of net income of $0.7
million, adjusted for amortization of right of use assets of $0.2 million, and net changes in our operating assets and liabilities, principally
comprising of an increase of accounts receivable of $1.7 million as we provided financial consulting services to more customers during
the six months ended January 31, 2023.
 
 Net cash provided by operating activities was
$0.3 million for the six months ended January 31, 2022 were all from continuing operations. Net cash used in operating activities from
continuing operations mainly derived from (i) net loss of $2.2 million for the six months ended January 31, 2022, adjusted for noncash
depreciation and amortization expenses of $0.1 million and loss from investments in trading securities of $0.8 million, and (ii) net
changes in our operating assets and liabilities, principally comprising of an increase of $1.4 million in accrued expenses and other
current liabilities as we ordered investments in trading securities through security accounts but the broker cleared our accounts in
February 2022, and an increase of $0.2 million in prepaid expenses and other current assets as a result of collections.
 
 Investing Activities 
 
 Net cash used in investing activities was $0.2
million in the six months ended January 31, 2023, primarily used in loans of $0.1 million to a related party, and investment in trading
securities of $0.1 million.
 
 Net cash used in investing activities amounted
to $2.0 million for the six months ended January 31, 2022, which primarily included the investments of $2.4 million in trading securities,
partially offset by proceeds of $0.3 million from disposal of two vehicles.
 
 Financing Activities 
 
 For the six months ended January 31, 2023, the
Company did not generate cash flows from financing activities.
 
 Net cash used in financing activities was $39,642
the six months ended January 31, 2022, attributable to payment of $1.0 million and $0.1 million to a limited partner of ATIF LP, as withdrawal
of investment and investment gain, partially offset by proceeds of $1.1 million in relation to exercise of warrants by investors who
subscribed for ordinary shares offered in registered direct offering which closed in November 2020.
 
 Critical Accounting Estimate 
 
 The preparation of financial statements in conformity
with U.S. GAAP requires management to make estimates and assumptions that affect the reported amount of assets, liabilities and contingencies
at the date of the condensed consolidated financial statements as well as the reported amounts of expenses during the reporting period.
As a result, management is required to routinely make judgments and estimates about the effects of matters that are inherently uncertain.
Actual results may differ from these estimates under different conditions or assumptions. Management determined there were no critical
accounting policies or accounting estimates. 
 
 10 

 Recently Issued Accounting Pronouncements 
 
 A list of recently issued accounting pronouncements
that are relevant to us is included in note 3 to our unaudited condensed consolidated financial statements included elsewhere in this
report.
 
 ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES
ABOUT MARKET RISK. 
 
 As a smaller reporting
company we are not required to provide the information required by this item.
 
 ITEM 4. CONTROLS AND PROCEDURES 
 
 Disclosure Controls
and Procedures 
 
 Under the supervision
and with the participation of our management, including our chief executive officer and chief financial officer, we carried out an evaluation
of the effectiveness of our disclosure controls and procedures, which is defined in Rules 13a-15(e) of the Exchange Act, as
of January 31, 2023. Based on that evaluation, our management has concluded that, as of January 31, 2023, our disclosure controls and
procedures were not effective in ensuring that the information required to be disclosed by us in the reports that we file and furnish
under the Exchange Act was recorded, processed, summarized, and reported, within the time periods specified in the SEC’s rules and
forms, and that the information required to be disclosed by us in the reports that we file or submit under the Exchange Act is accumulated
and communicated to our management, including our chief executive officer and chief financial officer, as appropriate, to allow timely
decisions regarding required disclosure. Our conclusion is based on the fact that we do not have sufficient full-time accounting and
financial reporting personnel with appropriate levels of accounting knowledge and experience to monitor the daily recording of transactions,
to address complex U.S. GAAP accounting issues and the related disclosures under U.S. GAAP. In addition, there was a lack of sufficient
documented financial closing procedure and a lack of risk assessment in accordance with COSCO 2013 framework. Our management is currently
in the process of evaluating the steps necessary to remediate the ineffectiveness, such as (i) hiring more qualified accounting
personnel with relevant U.S. GAAP and SEC reporting experience and qualifications to strengthen the financial reporting function and
to set up a financial and system control framework, and (ii) implementing regular and continuous U.S. GAAP accounting and financial
reporting training programs for our accounting and financial reporting personnel, and (iii) establishing an internal audit function and
standardizing the Company’s semi-annual and year-end closing and financial reporting processes.
 
 Management’s Annual Report on Internal
Control over Financial Reporting 
 
 Our management is responsible
for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rules 13a-15(f) and
15d-15(f) under the Exchange Act. In assessing our internal control over financial reporting, prior to the offering in April 2019,
we have been a private company with limited accounting personnel and other resources to address our internal controls and procedures.
Our independent registered public accounting firm, has not conducted an audit of our internal control over financial reporting. However,
in connection with the audits of our consolidated financial statements for the three months ended January 31, 2023, we identified four “material
weaknesses” in our internal control over financial reporting .
 
 ● We did not have sufficient personnel
with appropriate levels of accounting knowledge and experience to address complex U.S. GAAP accounting issues and to prepare and review
financial statements and related disclosures under U.S. GAAP. Specifically, our control did not operate effectively to ensure the appropriate
and timely analysis of and accounting for unusual and non-routine transactions and certain financial statement accounts; 

 ● We have not established an internal
control department and had a lack of adequate policies and procedures in internal audit function to ensure that our policies and procedures
have been carried out as planned; 

 ● We have not established sufficient
risk assessment in accordance with the requirement of COSCO 2013 Framework; and 

 ● We did not have sufficient documented
financial closing policies and procedures. 

 11 

 A material weakness
is a deficiency, or a combination of deficiencies, within the meaning of PCAOB Auditing Standard AS 2201, in internal control over financial
reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will
not be prevented or detected on a timely basis. We have hired additional accounting staffs and are in the progress of improving our system
security environment and conducting regular backup plan and penetration testing to ensure the network and information security.
 
 Furthermore, we are
in the process of implementing a number of measures to address the first to third material weakness that has been identified, including:
 
 1) 
 hiring more qualified accounting personnel with relevant U.S. GAAP
 and SEC reporting experience and qualifications to strengthen the financial reporting function and to set up a financial and system
 control framework; and 

 2) 
 implementing regular and continuous U.S. GAAP accounting and financial
 reporting training programs for our accounting and financial reporting personnel. 

 Especially for the identified
material weakness related to internal control, we will hire experts to improve and test our internal control and the set up a series
of standard and recurring internal audit work procedures before July 2023. We schedule to will perform self-assessment
of internal control effectiveness on a continuous basis, which will be led by our accounting and risk management department within the
year 2023. We will also hire more competent personnel and involve professional service companies to help us implement SOX 404 compliance
together with the establishment of our internal audit function. 
 
 However, we cannot assure
you that we will remediate our material weaknesses in a timely manner.
 
 Attestation Report
of the Registered Public Accounting Firm 
 
 This quarterly report
on Form 10-Q does not include an attestation report of our registered public accounting firm regarding the effectiveness of the
Company’s internal control over financial reporting, as such report is not required due to the Company’s status as a smaller
reporting company.
 
 Changes in Internal
Control over Financial Reporting 
 
 Except as disclosed
above, there have been no changes in our internal controls over financial reporting that occurred during fiscal quarter ended January
31, 2023 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. 
 
 12 

 PART II 
 
 OTHER INFORMATION 
 
 ITEM 1. LEGAL PROCEEDINGS 
 
 From time to time, the Company is a party to
various legal actions arising in the ordinary course of business. The Company accrues costs associated with these matters when they become
probable and the amount can be reasonably estimated. Legal costs incurred in connection with loss contingencies are expensed as incurred.
 
 Pending Legal Proceeding with Boustead Securities, LLC (“Boustead”) 
 
 On May 14, 2020, Boustead filed a lawsuit
against the Company and LGC for breaching the underwriting agreement Boustead had with each of the Company and LGC, in which Boustead
was separately engaged as the exclusive financial advisor to provide financial advisory services to the Company and LGC.
 
 In April 2020, the Company acquired 51.2%
equity interest in LGC after LGC terminated its efforts to launch an IPO on its own. Boustead alleged that the acquisition transaction
between the Company and LGC was entered into during the lockup period of the exclusive agreement between Boustead and LGC, and therefore
deprived Boustead of compensation that Boustead would otherwise have been entitled to receive under its exclusive agreement with LGC.
Therefore, Boustead is attempting to recover from the Company an amount equal to a percentage of the value of the transaction it conducted
with LGC.
 
 Boustead’s Complaint alleges four causes
of action against the Company, including breach of contract; breach of the implied covenant of good faith and fair dealing; tortious
interference with business relationships and quantum meruit.
 
 On October 6, 2020, ATIF filed a motion to dismiss
Boustead’s Complaint pursuant to Federal Rule of Civil Procedure 12(b)(6) and 12(b)(5). On October 9, 2020, the United States
District Court for the Southern District of New York directed Boustead to respond to the motion or amend its Complaint by November 10,
2020. Boustead opted to amend its complaint and filed the amended complaint on November 10, 2020. Boustead’s amended
complaint asserts the same four causes of action against ATIF and LGC as its original complaint. The Company filed another motion to
dismiss Boustead’s amended complaint on December 8, 2020.
 
 On August 25, 2021, the United States District
Court for the Southern District of New York granted ATIF’s motion to dismiss Boustead’s first amended complaint. In its order
and opinion, the United States District Court for the Southern District of New York allowed Boustead to move for leave to amend its causes
of action against ATIF as to breach of contract and tortious interference with business relationships, but not breach of the implied
covenant of good faith and fair dealing and quantum meruit. On November 4, 2021, Boustead filed a motion seeking leave to file a second
amended complaint to amend its cause of action for Breach of Contract. The Court granted Boustead’s motion for leave and Boustead
filed the second amended complaint on December 28, 2021 alleging only breach of contract and dropping all other causes of action alleged
in the original complaint. On January 18, 2022, the Company filed a motion to dismiss Boustead’s second amended complaint. Boustead
filed its opposition on February 1, 2022 and the Company replied on February 8, 2022.
 
 On July 6, 2022, the Court denied our motion
to dismiss the second amended complaint. Thereafter, on August 3, 2022, the Company filed a motion to compel arbitration of Boustead’s
claims in California. Briefing on the Company’s motion to compel concluded on August 23, 2022. The Court has yet to rule on that
motion. Boustead is also seeking a default judgment against LGC and recently filed an order to show cause for default judgment against
LGC. The Court has not ruled on Boustead’s request for entry of default judgment against LGC.
 
 ATIF is currently evaluating how it will respond
to Boustead’s motion for leave. In sum, the Boustead litigation is currently in the pleadings stage. Our management believes it
is premature to assess and predict the outcome of this pending litigation. 
 
 13 

 ITEM 1A. RISK FACTORS 
 
 As a smaller reporting
company we are not required to provide the information required by this item.
 
 ITEM 2. UNREGISTERED SALE OF EQUITY SECURITIES
AND USE OF PROCEEDS. 
 
 Not applicable. 
 
 ITEM 3. DEFAULT UPON SENIOR SECURITIES. 
 
 Not applicable.
 
 ITEM 4. MINE SAFETY DISCLOSURE. 
 
 Not applicable.
 
 ITEM 5. OTHER INFORMATION. 
 
 Not applicable.
 
 ITEM 6. EXHIBITS 
 
 The following exhibits
are filed herewith:
 
 Exhibit

 Number 
 
 Description of Exhibit 

 31.1 
 
 Certification of Chief Executive Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934 

 31.2 
 
 Certification of Chief Financial Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934 

 32.1* 
 
 Certification of the Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 

 32.2* 
 
 Certification of the Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 

 101.INS 
 
 XBRL Instance Document 

 101.SCH 
 
 XBRL Taxonomy Extension Schema Document 

 101.CAL 
 
 XBRL Taxonomy Extension Calculation Linkbase Document 

 101.DEF 
 
 XBRL Taxonomy Extension Definition Linkbase Document 

 101.LAB 
 
 XBRL Taxonomy Extension Label Linkbase Document 

 101.PRE 
 
 XBRL Taxonomy Extension Presentation Linkbase Document 

 104 
 
 Cover Page Interactive Data File (formatted as Inline XBRL and contained
 in Exhibit 101) 

 * The certifications attached as
Exhibits 32.1 and 32.2 accompany this quarterly report on Form 10-Q pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906
of the Sarbanes-Oxley Act of 2002, and shall not be deemed “filed” by the Registrant for purposes of Section 18 of the
Securities Exchange Act of 1934, as amended. 

 14 

 SIGNATURES 
 
 Pursuant to the requirements
of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.
 
 ATIF HOLDINGS LIMITED 

 March 17, 2023 
 By: 
 /s/ Jun Liu 

 Jun Liu 

 Chief Executive Officer 

 15
Text extracted from the filing as submitted to EDGAR. Formatting, tables and exhibits are simplified for reading; the original document is authoritative for anything you rely on.
ATIF Holdings Ltd 10-Q
